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The EPA Won’t Kill the Coal Industry

New regulations may not help coal, but it’s far from a dying energy source.

Depending on whom you ask, the past week has either been a major hit to America's domestic and labor markets, or a huge step forward in environmental protection. And it's not obvious who is on which side of the argument.

When the Environmental Protection Agency finalized its Cross-State Air Pollution Rule that will affect many coal plants throughout the U.S., reactions from those involved were mixed. The measure will require about 1,000 power plants to cut sulfur dioxide emissions 73%, and nitrogen oxide emissions 54%, from 2005 levels by 2014. Sulfur dioxide is a major component in smog and acid rain so environmentalists cheered the move enthusiastically. But some aren't so excited.

But many of the biggest users of coal aren't fighting the EPA ruling and are in fact in favor of the regulation. The Clean Energy Group, a coalition of major electric generators and distributors including Exelon(NYSE: EXC) and National Grid(NYSE: NGG), supports the measure. The group's executive director, Michael Bradley, said, "We believe the compliance dates and emissions reductions are reasonable and achievable."

If utilities weren't the ones fighting the new regulation, you could assume coal producers would be the big losers of such a move. But increasing demand from China would likely overtake any demand lost here in the U.S. And with coal prices remaining high, coal producers are still in a strong position.

The headlines might read as though this is the end of the coal industry, but that's far from the case. Coal plants aren't shutting down soon and demand is still rising worldwide. Coal isn't the energy of the future but it still powers most of the U.S., as well as a growing number of Chinese plants.

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